Founded in 1986 by Qasim Ibrahim as a shipping and trading company, Villa Group has grown into one of the largest business groups in the Maldives, with a presence across industries ranging from energy to fisheries, tourism, aviation, sea transportation and communication. Thanks to this broad experience, Managing Director Ibrahim Siyad Qasim is in a position to offer highly knowledgeable insights into the business opportunities for investors in the Maldives
Villa Group is a major conglomerate with a hugely diverse portfolio. Where is the company now?
Our group is active in many industries: we operate resorts, hotels, an airline and an airport. We are also in fisheries, canning and exporting tuna and frozen fish. We also work with fuel, which we import in bulk, and we have the largest storage capacity in the country for diesel and petroleum products. We are also a major distributor of building materials and LPG (liquefied petroleum gas). We’ve been doing a lot of business re-engineering work over the past three to four years, and we’ve also been doing a lot of investment in infrastructure assets. These have been hard to establish, but the work is now done. In terms of our airline, Flyme, it took a little while to get going, but now that we understand the dynamics of the business, we’re in a good position to provide support in the country, especially with the continued growth outside the Malé region.
Why did you feel there was a need for a new airline?
There have been a lot of domestic airports built and resorts developed in those areas, and these are distances that are not ideal to travel by seaplane because 35-40 minutes is the ceiling time where you feel comfortable in this type of aircraft – anything beyond that and you need domestic flight infrastructure to support the growth of the tourism industry in the country. I’m happy to say we’ve really been able to improve our services and our knowledge in these fields in order to grow. And I’m also happy to report that we’ve been able to grow a lot of talent locally; our full set of pilots for the airline are Maldivian, which I’m proud of. We are also training a lot of engineers, and we want to see more of this type of growth in human capital.
What have been your greatest challenges to get where you are now?
It was challenging at the beginning because in all of these industry spaces we were pioneers – not in the sense that we were the first in the world to do it, but we were the first here in the Maldives. So there were some unique challenges that we had to solve, and we did that. In terms of momentum, when it comes to the hotels, we are lucky that we have been in this industry for the last 30 years, and some of the assets that my father invested in were quite strategic in terms of location, size and the unique potential of the land. Due to challenges in sourcing finance and liquidity, we were not really able to invest in refurbishing those properties over the past decade, but we are doing so right now on places like Sun Island and Paradise Island. We have also acquired new islands for tourism development and submitted concept plans for a luxury 75-room property. We have two other projects in the pipeline; one of them is a resort development in the south of Maldives, and we are developing the business plan and concept plans for that as well – but we will begin this project after we finish refurbishing our existing properties. We are also on the lookout for new property for development in the Maldives, which is a challenge in the Malé area as there is no more available land for development, and it’s a similar story in Ari, Baa and other atolls.
How do you combine tourism development with environmental protection?
Development in the Maldives is constrained by environmental regulations. We are supportive of this because, at the end of the day, we recognise that our environment is very fragile, so we do the best we can to preserve and protect it. In one sense, it’s good for the tourism industry as a whole, because there was some concern a few years back that there was too much supply coming on the market. But to put things in context, I think that this feeling came from the way that tourism developed in the Maldives, in a very controlled way, which was good because it preserved the unique value proposition it was promoting. It did not get overly commercialised at the beginning, but now I think it will reach the normalisation point where you will not see any more new supply coming into the market, just because there is no more land left to be developed for resorts.
What is your relationship with UAE businesses and investors, and what potential is there for increased collaboration?
We appreciate the infrastructure that the UAE has brought to the country, and we recognise that they are the largest carrier of tourists into the Maldives as they offer a great connectivity service. Tourism in the Maldives could not develop in this fashion without that kind of connectivity and convenience, which was not on offer earlier. We also do a lot of trade with UAE in terms of sourcing all kinds of things such as building materials and general goods. We have also tried to secure finance from the UAE in the past, but the response we received at the time was that UAE banks and lenders only provided funding if there was a UAE or Gulf investor with assets in the area. You see a similar finance pattern in other places like Japan, for instance. Japanese banks have the lending capacity but they only feel comfortable if there is a Japanese asset locally. But we have sourced from Europe, and we are seeing more investment coming in from the Asia region. This adds a lot of investment flavour, and the liquidity of the market is improving in a very healthy way. For investors, that is a very interesting situation to consider.
Villa Group owns and operates five of Maldives’ top resorts as well as the Villa Hotels brand. What makes these stand out in a competitive industry?
We offer great value for money because we really drive value into the product in terms of beauty, level of care and attention to our clients. You see it from the number of repeat customers that we have; we recently had a repeater who has been coming every year for two decades. We have very close relationships with lots of clients, and this is like home from home for them. We operate more as a family than as a hierarchical group, and I think this is very important for service-oriented hotels. What is also unique about us is that most of our top management is made up of local employees, people who have grown up with us for the last 40 or 50 years.
What other services can you offer tourists besides the accommodation?
There are the water-sports, the fun of visiting Robinson Crusoe islands, or having a very private romantic dinner… And there are breathtaking views to be enjoyed from elevated spots. We have a variety of water activities, including snorkelling, boating, surfing and more. All our diving centers are certified and work to the highest safety standards, and the same goes for any other water activity, which we take extremely seriously. We also offer visitors good connectivity.
What advice would you give to UAE investors, and where do you see opportunities for growth? Is there any chance of partnerships?
I think my father has been considering partnerships for some of the new developments, but he is very selective and traditionally we have not considered any equity divestment. But it’s a question of finding the right partner. As for investors, it depends on their business vision, whether they want to expand an existing portfolio of assets in tourism, for instance. But if you’re a generic investor, you may consider infrastructure assets, because you could structure it in a way where you could exit if you needed to. That could be quite interesting.
Do you have any final message for readers of Gulf News?
The UAE is highly appreciated here as a very close and friendly nation. We welcome them as tourists and investors alike; the relationship between the UAE and the Maldives is always a good partnership.